Metro News & Reviews

Update on state transit funding

Metro employees often receive email alerts about key legislation that impacts the agency. This alert went out yesterday, concerning the proposed cuts to transit funding in the state budget.

As debate over the budget continues, I thought this may be useful in helping you sort out some of the issues and how they may end up impacting Metro. Due in part to the proposed state budget, Metro is grappling with a projected $251-million budget deficit in fiscal year 2011 and that may result in service cuts as a way to make up the shortfall.

Here’s the alert:

STATE SENATE TO CONSIDER DRASTIC DISMANTLING OF STATE TRANSIT FUNDING

ISSUE

The Legislature is expected to consider a drastic restructuring of transportation funding. This proposal includes a modified version of the Governor’s tax swap proposal and could be submitted for a vote in the Senate as early as Monday, February 8, 2010. The Senate’s proposal is as follows.

* Endorse the Governor’s proposal to replace the sales tax on gas with an excise tax on gas which eliminates Proposition 42 protections for these funds;
* Eliminate three of the four fund sources for the Public Transportation Account (PTA) undoing decades of established transit funding;
* Maintain one of the four sources of funds to the PTA (the sales tax on diesel fuel) and allocate an estimated $313 million this year; and
* Allow Metropolitan Planning Organizations to impose a fee on gasoline linked to SB 375.

We understand that State Senator Alan Lowenthal has agreed to carry this legislation.IMPACT

This proposal has several major impacts:

* Permanently eliminates 3 of the 4 sources of funds to the Public Transportation Account.
* Provides a minimal amount of funds through the State Transit Assistance Account this year and potentially in the future. This proposal would result in $46 million for Los Angeles County transit operators.
* Eliminates Proposition 42 funding and replace the highway and street and road portions with a gas tax increase that would be subject to legislative diversion every year.
* Allows the MPO in our case (SCAG) to impose a fee based on SB 375 targets to offset the impact to transit.

ACTION NEEDED

We urge Board Members to contact members of the Los Angeles County State Legislative delegation and urge them to reject this proposal. I have sent a letter to the Governor opposing his proposal. The letter has been distributed to the State Legislature.

KEY POINTS

* The Legislature should not rush into such a drastic restructuring of transit funding in exchange for an uncertain fee that will be challenged in the courts.
* The Legislature should not grant new authority to raise fees to agencies that have no experience imposing them.
* Metro remains available to working with the State to solve the budget crisis but not at the expense of our core funding programs.